Category Archives: Statistics

The Use and Abuse of Statistics


There are maxims worth following whenever a politician makes use of statistics. In particular, in whose interest are the statistics prepared and published and are they being interpreted acurately and fairly. Let us consider the thorny issue of the effect on families in Greater London of ceilings and cuts in Housing Benefit. According to Government statistics,  and let us say they are right, there are 17,500 families and some 82,000 people. The London Boroughs speaking collectively are preparing plans for what to do if all these people could not pay higher rents, could not make other provision and were therefore forced to move.

Ask some questions:

1. Would all these tenants be forced to move? No, but no one has bothered to find out. Come on Government,  survey them first and give us the answer. 2. What proportion of these tenants are short stay anyway with agreements running up to 3 years.? Up to 40 percent of landlords, according to the Landlords Association but they would say this wouldn’t they. 3. Up to 30 percent of landlords according to the Landlord’s Association  They don’t tell us by how much. There are other estimates ranging fr0m 30-50 percent some of which come from Tory Councils. They would say this wouldn’t they. 3. Some of these tenants might be given social housing by their Councils. Source Tory Westminster Council. What is the current waiting list? Not given. It must be lengthy, say up to ten years. No chance. 5. Not to worry anyway the Government has put aside £130 million to mitigate hardship. Sounds a lot. Let’s say every family affected was a hardship case. If this was true 17,500 familes  would each get £742 pounds. Enough to pay 2 weeks rent. Whacko.  Lets be fair. Reduce the number forced to move by 20 percent as a result of lower rents that they could afford, and a further 20 percent for their own ingenuity, and ten percent for short term rentals and a willingness to move on. (Statistical point. These percentages are not additive) and we might say that 50 percent of families, 8,750,   will have to leave their homes  and most will go into boarding accommodation on the South Coast. 5.. At what cost? Not known.  Leaving this aside the Government could give the families concerned and the Councils bearing the cost £130 miillion towards the cost of this, that is £1,484. How long would this last? Are there jobs for them in places like Hastings with very high rates of unemployment? I have not seen any figures. Come on you Council’s, tell us.

You might say that the Coalition Government, in the interest of transparent administration should tell us. If Labour MPs were smart enough they could ask the Parliamentary questions that would give us all the answers. Come on you Labour MPs and Labour C0uncillors. Do your job.

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Elasticity of Demand


Everyone is an economist these days and many of these new pundits have never read an economics text book. Alan Johnson is not the first to admit it and rumour has it that James Callaghan was sent  on a course at Nuffield College. Of course, some of their advisers  have read something along the lines of economics . So it was a relief to me to  tune in to a debate in the House of Lords on the proposed rise in tuition fees and hear economic terms being used.

An issue discussed was would an increase in tuition fees reduce the number of people applying for a university place particularly the ‘deserving poor’. The Coalition argues that when Labour did it applicants dropped for a short time and then the rise resumed. Well as any economist knows whether it rises or falls  depends on the elasticity of demand for university courses and their supply in the past and in the future. It is possible to calulate the numbers for the earlier period and make some reasonable forecasts now when the determinants of demand have changed. Has any one done that? if so please speak up. Obviously when Labour did it the demand for university places was rising and their provision expanded to meet this demand. The total number of applicants were on that part of the demand curve that was rising quickly.  The potential supply of students is not infinite and we would expect the rise in the percentage of the population going to a university to level off within its limits. Of course there is the issue of rising population and overseas students. No one said that forecasting was simple?

Then there is the issue of rents in London  the elasticity of demand for the properties occupied by 17, 500 hapless Housing Benefit families. What we might wonder are the demand  and supply curves for this accommodation in London. There is no doubt the population of London has been growing fast and the demand for rented accommodation has been rising. What is the percentage of these 17,500 homes to the total number of such properties in the whole of London by segment? Let’s guess. Pretty small I hear you say. And what is the demand for them? Well, you might say,  getting into the swing, the curve must be rather steep. After all who can get a mortgage these days? Atta boy you are getting the idea. What we need to predict are the growth rated in family establishments and the need and aspirations of people to settle in London. Look, you can stop at this point. I think you get the drift of this. What I am saying is that when you are seeking to change Housing  Benefit it is reasonable to predict the consequences and not make up fairy tales.

I am a prodigious borrower of books from my local library most of which comes from the British Library at £3.50 a book. My librarian tells me that the charge is to rise to £10 a book which is the real cost of the British Library lending it. I consult these books rather than read every word in them. At the British Library there is no limit to the number of books I can borrow in a day. Let us assume I work in the British Library on ten books free of charge which is quite usual for me. I can get there by train for £25. I resolve not to borrow these books  through my local library. It is a matter of elasticity of demand you see. Anyone know what it is? At the end of the year some accounting Wally will argue that there is no local demand and the Council should withdraw the facility.  And so on.

What is my gripe? The illiteracy of many people, and especailly, the politicians who debate these important public issues.

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Austerity Without Impoverishment?


The road to hell is paved with good intentions. Few doubt the sincerity of Lib Dem members of the Government: they do genuinely wish to be fair and to reduce  poverty, especially among children but outcomes depend on the implementation of the right policies not Conference resolutions. These thoughts are prompted by a report of the Institute For Fiscal Studies (IFS) which concludes that as a result of fiscal measures take by the Coalition todate the poorest families will lose five times as much as richer childless families, as a percentage of their annual income,  over the next four years.

The debate about this  will need to address a central dilemma, The question is:  when real incomes fall, as they will over the next four years, can you protect the poor and vulnerable? No, you can’t. The popular ditty is right: ‘the poor get poorer and the rich get richer.’ But you can alleviate the impact of fiscal constriction. The burden of cuts cannot all be borne by the public sector for poor people are more dependant on them and the incidence of tax increases must not fall unfairly on the poor. The case against the VAT increase, despite the increasingly sophisticated reasoning in its favour, is a case in point.

The Lib Dems cannot prevent unfairness by talking the talk. The truth is that they have sold out. They are committed to support Tory policies to eliminate the budget deficit in four years and mainly by swinging cuts in public services. You can’t help the poor by contracting the economy, reducing their chances of a job, and  slowing the growth of national income. Chickens will come home to roost. If you are patient and wait a short time you will see them return.

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Reading the Economic Runes


The economic runes become unreadable at moments of transition. Clearly the West has been moving away from a severe global downturn  but only after a massive world-wide financial intervention by European and US administrations and at at huge political and economic cost to  the participating countries. There is little appetite for more financial pump-priming, necessary though it may be, among  electorates, parties or governments. As at all times of transition there are good signs and bad: employment in Britain is rising, currencies are stronger, the cost of financing debt has fallen and the balance of payments is moving in our favour. However, these changes lack permanency for we are selling into stagnant markets and are busily destroying hundreds of thousands of jobs; consumer and business coinfidence has fallen steadily to be  suspended now  in no man’s land.

It cannot continue like this and although,  in economic management as in life, experience is not normally at the extremes, these coming  moments may be different. We cannot look to Obama and the United States for economic leadership for the President is running scared of the mid-term elections and Gordon Brown (of blessed memory) is no longer with us. In his place we have governmental pygmies and a painful and unconvincing contest for the leadership of the Labour Party which so far has served us ill.

The proving ground (I almost wrote killing ground!) comes upon us in  October with the pre-budget report. If, as I believe, the economic position will have worsened something (surely something!) must be done to steady our ship of State and to draw back from hara-kiri. There is a key role for the Opposition: it is a time to be clear and decisive about what must be cut and what saved and what more can be done internationally and nationally to prevent the drift into a decade of economic depression, and   a downward economic cycle. It is only when we have a clear political alternative  that we can find an economic one. Might this not be the time when an olive branch can be given to those glum Lib Dem members that occupy benches on the wrong side of the House and shouldn’t we be thinking of it NOW. It took the Coalition six days to cobble together a programme for Government. What can the progressive Left put together in ten weeks? Surely something a good deal better,  not just for Britain, but for the world’s trading community, can be fashioned from the ruins of the old?

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The Office for Dodgy Statistics


I am proud to announce the establishment of the independant  Office for Dodgy Statistics and to explain its objectives to you. In Britain we  have a good record for producing high quality statistics such as in the National Office for Statistics. However, these organisations, good though they are,  suffer from serious disadvantages. They are staffed by statisticians! The figures these statisticians produce are somewhat complex, intricate often,  and their conclusions subject to numerous caveats. It is not too great an exageration to state that their output can only be understood by other statisticians so leaving the man in the street without figures he can rely on.  In a democracy this is insufferable. Let me give some examples. You and I know that crime is a dreadful problem in Britain and is rising. However, our official figures show them to be falling. My office will re-configure these indices to show the true position so that public confidence can be restored. Let me give you another example: examination results in our schools. The official statistics show that more and more children are getting A-C grades in their GCSE examinations . Now over 80% and rising. At the current rate of progress 105% of children will get these grades! Yes, don’t laugh. Absurd isn’t it? We will re-base these results so that the figure is some 70%. At a single stroke the number of children getting into good universities will come down; and your Free Schools, when you start them, can show immediate results Now let us consider a really serious subject: immigration! Your Coalition Government has put a cap on non-EU numbers coming into this country. If I am honest with you I must admit that such a cap is difficult to administer and the pressure to admit skilled migrants is very strong. We have a solution. We have cancelled the computer project which enables the counting in and out of migrants. Now no-one will know for sure how many migrants are in the country. We shall produce figures consistent with the cap so re-assuring the public that they are not being swamped. I do hope that you are getting the general drift of my argument. We are about building optimism and confidence in the future without which little can be achieved. (applause at this point).

Confidence must be built in the Big Society. When you take off time from your voluntary work to have a pint in the social club or your favourite pub we wish you to be armed with the information needed to encourage slackers to take part. You will be able to quote the muber of hectares of grass your team has mown, the square footage  of  railings painted and grafiti removed from walls, the numbers of pensioners helped with their shopping (Iused to do this at Eton, yes, truly I did! Stop laughing at the back!). In this way we shall be able to show that the Big Society has been far more successful at carrying out essential tasks  than the old discredited bureacratic organisation of Labour’s Big Government. That is our task. We are not going to let those dreary over-paid statisticians (do you know some have a higher salary than me!) spoil our fun – your fun really. Trust me! I’m a Tory.

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